Saks Creates Omni-Management

Saks Inc. has reassigned its senior managers to broad cross-channel responsibilities and has anointed them with “omnichannel” titles.

Saks Inc. has reassigned its senior managers to broad cross-channel responsibilities and has anointed them with “omnichannel” titles.

“We have to change how we do business,” said Stephen I. Sadove, Saks’ chairman and chief executive officer in an interview Thursday. “The world has been moving forward toward an omnichannel environment where customers want to shop anytime, anywhere. You want to look holistically at your business.”

Ron Frasch, Saks’ president and chief merchant, is now more directly involved in overseeing the omni-merchandising strategy, though his title does not change.

Joseph Boitano, group senior vice president and general merchandise manager for divisions one and two, which refer to the designer and contemporary businesses, has been named omnichannel group senior vice president and gmm. Boitano reports to Frasch.

“In this newly created role, Joe will own the holistic vision and strategy for divisions one and two,” Sadove explained. Before, Boitano ran the women’s designer and contemporary businesses from a full-line store mind-set. Now he has responsibility for the strategy and direction for those women’s businesses at the Saks Fifth Avenue full-line stores and saks.com.

Frasch and Boitano were only part of a laundry list of management changes at Saks this week reflecting the company’s accelerating omnichannel approach. Two weeks ago, the retailer juiced up its SaksFirst loyalty program with a richer array of perks and revised rules to widen participation across channels. The company also began rolling out free shipping on purchases made with the Saks card at either Saks Fifth Avenue, the Off 5th outlets, or on saks.com. Last year, Saks spent $30 million to $40 million for omnichannel initiatives collectively called Project Evolution.

Several other Saks senior executives also now find themselves with greater responsibilities across channels and more complicated jobs. Cody Kondo, group senior vice president and gmm for division six (women’s accessories), has been named omnichannel group senior vice president and gmm, and will assume a dotted-line responsibility for the Saks Direct division six business.

Two other senior vice presidents and gmms, Tom Ott and Deborah Walters, have added omnichannel to their titles. Ott oversees divisions three and seven (men’s and home) and Walters supervises division eight, beauty. Ott will assume a direct responsibility for Saks Direct division three and seven businesses jointly with Su Kim, a vice president and divisional merchandise manager at Saks Direct. Kim also works with Walters at Saks Direct division eight.

Keith Campbell, senior vice president of merchandise planning, has been named group senior vice president, merchandise planning and will lead the omnichannel vision for merchandise planning and allocation “to maximize inventory across channels and drive profitable volume growth,” Saks said.

The omni-reorganization “sends a strong signal to the vendor community that we want to go to market together, as a total Saks company with a strategic direction,” Sadove said. “You want to have a holistic view and an overall strategy for managing a given category. We’ve spent months working on this.”

Moving Saks into an omnichannel culture entails “how people work and interact with each other and making sure that we are maximizing collaboration in the organization,” Sadove said.

“Everyone [in retailing] is going to have to deal with omnichannel,” Sadove added. “The challenge is that no one size fits all and the reality is we have a very fast-growing Internet business. We wanted to create an environment where the Internet could thrive, build off of synergies and collaborate with our store business. There has to be a much higher degree of working together. It starts at the senior level. We want Ron [Frasch] to be accountable for the overall merchandising strategy for full line and the Internet business.”

Sadove said the omni gmms will provide leadership and strategic guidance in their categories. He also said Saks will maintain separate buying teams for the stores and Internet, though the Internet gmms report to the omni gmms. “Outlets don’t fall into this,” Sadove said, noting that the Saks Off 5th outlet chain maintains its own buyers.

Sadove said the omni strategy involves some staff increases, and no head count reduction. “We are putting some more resources in planning and may over time reallocate some resources from one organization to another.”

Aside from better managing the selling channels, the reorganization, Sadove said, will help the team put more items online. Currently, Saks’ merchandise online represents a “tiny” percentage of what Saks has in its stores, Sadove said.

Asked if what sells online tends to also sell in the stores, Sadove said to the contrary, “You see very different things selling between the two channels. The Internet tends to be more item-driven and fashion-forward. You will see within a given brand different things selling on the two channels.”

There is a perception that Saks’ omnichannel initiatives have lagged other retailers such as Nordstrom and Macy’s, which have been in the game longer. But Sadove said, “We are right up there, if you look at our percentage of business online. We don’t break out sales online, but they’re higher than most. We are very competitive. We are well into omnichannel. We have one of the largest luxury Web sites in retail and we feel very good about the collaboration we have to date, between our stores and the Internet.” But the management reorganization, he said, “takes us to a whole new level.”

Where Saks is catching up, he acknowledged, is on the technology side. Macy’s has been shipping from stores for at least a year and was about nine months to a year ahead of Saks on that front, Sadove said. Saks began shipping from stores last quarter.

In other personnel changes, Yumi Shin has been promoted to Saks Direct senior vice president and gmm for divisions one and two and chief site merchant. Lincoln Moore has been promoted to Saks Direct senior vice president and gmm for division six.

Kate Brems has become omnichannel senior vice president of planning, divisions one, two, six and leased. Suwon Yang has been named vice president of planning, division one. Virginia Stacy Beck has been named senior division planning manager, division six (jewelry) and Joe Cano has been named senior dpm, division one, Saks Direct. Melissa Baker has been appointed omnichannel vice president, planning, divisions three, seven, eight and demand planning. Andrew Cox has been named senior dpm, division eight and demand planning, and Stephanie Nanz has been named senior dpm, divisions three and seven.

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